For the Quarter Ending September 2023
North America
In the third quarter of October 2023, the North American Sodium Lignosulphonate market faced challenging conditions, primarily marked by a bearish trend. During this period, the price of Sodium Lignosulphonate in the United States saw a notable decline of around 2%. This price decrease was a result of several interconnected factors that collectively impacted the market negatively. Notably, the construction industry, a significant consumer of Sodium Lignosulphonate, experienced sluggish demand due to a variety of factors, including economic uncertainty and a slowdown in construction activities. This lacklustre demand combined with a relatively high supply of Sodium Lignosulphonate exerted further pressure on prices. One notable contributing factor to the challenging market conditions was the Panama Canal drought situation. This unexpected event disrupted export demand for Sodium Lignosulphonate, leading to a buildup of inventories at various ports. In response to the growing inventory issue, traders adjusted their pricing strategies, offering Sodium Lignosulphonate at more competitive rates to clear excess stock. Another critical element affecting the market dynamics was the ongoing labour shortage in the United States. The labour shortage was widespread, with the US Chamber of Commerce reporting that job openings exceeded pre-pandemic levels while labour force participation rates remained below their pre-pandemic levels. This labour challenge had a significant impact on the construction industry, further diminishing its demand for Sodium Lignosulphonate.
Europe
In the third quarter of 2023, the Eurozone Sodium Lignosulphonate market experienced a bearish trend. This downturn was exacerbated by the rise in interest rates, which had a discouraging effect on potential construction projects. Notably, there was a significant reduction in housing activity, particularly within the German construction sector, leading to a notable decrease in overall construction activities. Within this challenging landscape, the broader economic situation in the Eurozone was marked by mixed signals. The manufacturing sector showed signs of contraction, underscoring the difficult economic conditions towards the end of the quarter. Despite the decrease in input costs, businesses across the Eurozone continued to implement cost-cutting measures, including workforce reductions, reduced purchasing activity, and inventory management. As a result, many companies extended their production cutbacks, reflecting an overarching sense of caution and uncertainty that pervaded the economic outlook. The third quarter of 2023 in the Eurozone was characterized by the construction industry's decline, subdued housing activity, and a cautious business environment, as it grappled with a variety of challenges.
Asia
In the third quarter of 2023, the Sodium Lignosulphonate market in Asia, primarily focused on China, experienced a roller-coaster ride of fluctuating prices and market dynamics. Initially, the product's price decreased by 1% due to sluggish construction activities and falling prices of key feedstock components. This decline was exacerbated by heavy rainfall, which reduced demand and strained manufacturers' inventory management. However, the market's fortunes reversed in the latter two months of the quarter, with prices surging by 1% and 2%. This turnaround was attributed to increased global Sodium Lignosulphonate prices and heightened downstream procurement activities. Efficient port shipments and low refinery inventory contributed to this positive trend. The refined Sodium Lignosulphonate segment, in particular, saw increased demand from downstream industries, which drove prices upwards. Despite this recovery, challenges remained, as adverse weather conditions and intense market competition influenced the market landscape. Some downstream entities adopted a cautious approach, fostering a wait-and-see sentiment. The quarter's performance highlighted the market's sensitivity to external factors and its ability to adapt to changing conditions.
Middle East
In the third quarter of 2023, the Sodium Lignosulphonate market in the Middle East, with a specific focus on the Saudi Arabian market, exhibited a dynamic performance. Initially, during the first month of the quarter, the price of the product witnessed a 1% decrease. This decline was primarily attributed to the subdued state of the cement and concrete sectors, where construction activities were notably at a moderate to low level. Furthermore, the declining prices of the feedstock caustic soda had an additional impact on the decreasing prices of the commodity. However, the latter two months of the quarter saw a reversal in this trend, as the product's price increased by approximately 1%. This uptick can be attributed to global price increments. Market sources reported that the demand for the product remained relatively stable throughout this period, and the improved financial conditions in key global economies played a vital role in supporting the overall price uptrend within the country. Furthermore, the conclusion of the monsoon season in several Asian economies resulted in a notable decrease in inventory levels. During this timeframe, production activities remained temporarily halted, affecting the overall supply chain. In addition to these factors, demand for the product began to show signs of improvement, particularly from the construction and glass industries. This increased demand provided further support to the global price uptrend. As the quarter progressed, it became evident that the market was responsive to various external factors, making it a period of fluctuation and adaptation for the Sodium Lignosulphonate industry in the Middle East, particularly in Saudi Arabia.
For the Quarter Ending June 2023
North America
Sodium Lignosulphonate prices kept on rising in the US market throughout this quarter. As per the data, a significant rise of around 7.6% was observed in the US market during Q2 2023 on the back of a rise in international demand amidst moderate to low offtakes from the domestic market. Further, according to sources, the price of Sodium Lignosulphonate has been consistently stable for a very long time, with only minor fluctuations occurring on a weekly basis. Due to steady offtakes in the midst of high inventory levels, the price fundamentals for the product in the US remained stable overall in the middle of the quarter. Additionally, Russian product supplies have been sluggish globally, and traders anticipate cargoes to arrive in one to two months. In the meantime, Chinese material is meeting demand. The US domestic construction sector showcased a surprising rebound during May 2023. However, as per the recent analysis by FRED, construction activities in the USA remained slow during June, which has been affecting the pricing dynamics of the product. Thus, projecting a decline in the coming quarter.
APAC
In Asia, Sodium Lignosulphonate prices showcased mixed sentiments throughout the second quarter of 2023. The prices sustained an overall uptrend in India but rose only in May for China. The data shows A significant rise in the price of Sodium Lignosulfonate has been observed during this week due to low availability in the country amidst depressed demand after the impending threat of lockdown. International demand remained ample enough to support the overall uptrend in the country, as there was a lack of Russian material in the market; this gap was filled by Chinese traders. According to NBS data, the value-added industry growth rate declined from 5.6% (April 2023) to 3.5% (May 2023). On the other side, in India, expensive imports from the international market, including the USA and China, affected the pricing dynamics of the product in the country. From the demand perspective, the quarter started with an overall firmness in demand, which was a seasonal phenomenon (arrival of summer). However, traders were getting cargoes at either lower or stable prices, but in lieu of low domestic availability, traders didn’t let the trend trace other ways.
Middle East Asia
The Saudi Arabian market fluctuated marginally during the mid of the quarter on the back of expensive imports from overseas. As per the data, Sodium Lignosulphonate prices rose marginally during the month of May 2023 owing to the rise in prices across the global market. The data shows, during the month of May, Sodium Lignosulphonate prices rose globally, thus affecting the price trend in the Saudi Arabian market. Furthermore, during April 2023, on the occasion of the Ramadan festival, procurement, as well as production activities, were slowed down, which eventually led to a decline in inventories level. Therefore, during the festive season (after Eid) market started to rebound, and traders started their procurement activities in the country, which led to a rise in the prices of Sodium Lignosulphonate in the domestic market of Saudi Arabia. Additionally, the price rebound had not much relation with the domestic demand, and traders were pinning their hopes on the arrival of a seasonal wave of consumption. Sodium Lignosulphonate prices were assessed at around USD 675/Mt in the Saudi Arabian market on a CFR basis.
Europe
European Sodium Lignosulphonate prices remained rangebound throughout the quarter due to expectedly low consumption from the domestic downstream industries amidst ample supplies of the product in the region. As per the market sources, demand fundamentals for the product remained low throughout the quarter, as key European economies, including Germany and UK, heard to sbe on the edge of recession. However, some experts believed that Germany was already in a recession and likely to be in it till the end of this year. Nevertheless, no official release was present to prove this fact. On the other side, demand for the product remained low in the European market due to consistently low economic activities exacerbated by violence erupting in France and the ripple effect of the US economic slowdown. Thus, all these factors not only affected the price trend of construction-related raw materials like Sodium Lignosulphonate but other commodities too. However, Regional freight charges remained high during this quarter, too, affecting prices of several commodities, including construction raw materials.
Sodium Lignosulphonate prices saw a downward trend throughout Q1 2023 under the influence of low demand and muted queries from international markets. Instead of an abundance of supplies in the regional market, the prices were not seen inclining in the North American region. Market sources revealed that traders were getting cheaper cargoes due to pessimism hovering around the globe related to the recession, especially in USA and Europe. Furthermore, demand remained lackluster from the construction sector, and traders had already procured enough cargo. Sodium lignosulphonate prices were assessed at USD 624/MT during March, i.e., end of the quarter.
Sodium Lignosulphonate prices saw a downward trend in the first quarter of 2023. As per the data, Sodium lignosulphonate prices fell effectively and hovered around USD 217/MT during March on a FOB basis. Ample product availability in the country has affected the pricing dynamics of several commodities, including sodium lignosulphonate, in the regional market during Q1. Demand for the product remained moderate, and a marginal improvement in demand was overserved in the later part of the quarter In comparison to the previous months. However, enough availability didn’t let the price of the product show any positive price variation during the quarter in the region.
The sodium Lignosulphonate prices in the Middle Eastern region were assessed at 652/MT on a CFR basis during Q1 2023. During the slowed economic activities and wavering offtakes, the Sodium Lignosulphonate demand in the construction sector remained muted. Ample supplies remained a major factor behind this price movement during this order. Furthermore, the price of feedstock Sodium Hydroxide also remained low to moderate and hovered in a stable range. A smooth flow of cargo was observed in the European market during Q1. Furthermore, market participants maintained a negative pricing momentum for the first quarter due to weak demand fundamentals and muted spot activity globally amidst competitive market circumstances and high stock levels.
